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Looking for feedback about entrepreneurial experiences with the Keiretsu forum.

We're in the early stages of our seed raise, releasing our MVP in the next 10 days or so. We've been talking to the Keiretsu Forum about potentially presenting to their NoCal and SoCal groups. Since their presentation fee is fairly steep, I'd like to understand better from those that have gone through the process how it worked out for them (pros/cons). I like what I hear and see so far, just looking for direct startup feedback. They seem to be fairly selective.

16 Replies

Alex Littlewood
4
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Alex Littlewood Entrepreneur • Advisor
Founder & CEO at Motoroso
They will let you sit in on a session, I highly suggest you do so to see how they operate. After I did so, I ran for the hills. I am suspicious of any organization that wants to charge startups to pitch. Here's what I observed:
  • They charge a lot of money to pitch, and not a single of the 10 companies even got close to getting funded.
  • The "angels" seemed to enjoy grilling entrepreneurs and acting like they are investment geniuses, but it seemed like more chest puffing than real interest. Then after the entrepreneurs leave they throw around their opinions and talk down to each other, very little critical assessment of the entrepreneur, business model, or the deal. I got the sense it's a bunch of old people with money just burning time in their day.
  • After realizing none of the 10 companies would get funding, I wanted to research just how many deals Keiretsu forum does. So I contacted one of their people that "sells" to startups and asked how much funding has flowed from KF to startups. They claim they have 3,000 Angels and in 2013 they invested $8.1M. WHAT? That's right, a measly $8.1M came from their 3,000 Angels ($2,666 per angel) to the ~480 companies that would have pitched in that timeframe. For a group with that many angels I was shocked, and realized the odds of being funded by this group are EXTREMELY LOW.
That's what I came away with. But maybe that's just me. And maybe I don't know anything. And maybe I just hurt any chances that I'd ever raise from an Angel in Keiretsu Forum.
Eliav Cohen
0
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Eliav Cohen Entrepreneur
Investor and Founder
I would say most of those groups will be a waste of your time and money. If you do not have traction, I would wait. It is a great place to meet investors, but you will not receive funding by paying to be at their events. I would suggest getting traction and raising a convertible note from friends and family, and then use them later if you need it. Friends and family are the way to go at your stage. Eliav
Eliav Cohen
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Eliav Cohen Entrepreneur
Investor and Founder
After checking out your site..do you have any traction? I would not share with anyone until you have 10 plus free clients to see how your mvp works.
James Palmer
0
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James Palmer Entrepreneur
CEO, GamerDating
Lovely guys, if they're offering you go and pitch to them do so. They're extremely strict in who they select. Have been in 4 pitches with them in both Seattle and London for various companies. Can't hurt to try and see how they react to you guys. They also don't charge money to pitch unless you meet their investors (There is always a screening round that is done for free, these are very informative and they spend alot of time with you), and the feedback is generally very high quality.

They're an angel network, they have alot of different forums everywhere so can only speak for the Seattle and London branches. The quality of any angel networks comes down to the companies and deals they've financed before. They were interesting for us purely on the basis they funded Arenanet back in the day and that was a great bet.
Andrew Royal
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Andrew Royal Entrepreneur • Advisor
CEO ILLUMAGEAR, Inc.
I don't want to pick on any specific investment group. Some are great. We got terrific support from one. Others seem much like what Alex describes. Very early on we paid to pitch to a couple of angel groups. The lesson learned for us is "don't pay to pitch" (beyond, say, a small administrative fee to cover lunch). A startup that's dialed up will attract serious investors. Your time is better spent networking to find them.
Joe Monastiero
0
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Joe Monastiero Advisor
CEO, Founder nFlate
Some more info - we do not have any friends and family options, worked that angle for the past 4 months fruitlessly. We release in a few weeks, we expect quick traction, partially due to the free beta period. I've bootstrapped the company myself for the past 16 months (we pivoted 6 months ago).

I wrote the blog post "The Paper Napkin is Dead", so I'm unfortunately all too familiar with MVP/Traction/Raise order of events. In my discussions with Keiretsu, they also recommended waiting for MVP and some traction and that was always my intent.

Good specific feedback Alex, thanks! (thank you, Eliav, as well of course)
John Seiffer
2
0
John Seiffer Advisor
Business Advisor to growing companies
I'm about to go to my first Keiretsu meeting this Friday (as an investor, guest not a member). From what I was told by the chapter head, they do a fair bit of consulting/coaching during the screening process. If that's free as was mentioned by James Palmer, then it might be useful. Just remember, pitching to investors is more like dating than like scientific analysis. So at some level what's given as "advice" might just be opinion.

BTW - In my previous life as president of an angel group in another state, we tended to disregard groups that charged companies to present, and gave any recommendation from such groups a rather skeptical hearing.

That said, I would check out people who have pitched to this group before and get their viewpoint.
John Seiffer
0
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John Seiffer Advisor
Business Advisor to growing companies
Joe,
I don't know what your startup does, but trying to raise funds without traction is not wise. If you do get investment the terms will not be favorable.

Companies have 2 major risks to overcome. 1) Technical Risk - will the damn thing work and 2) Market Risk - will anyone care enough to pay for it. In MOST companies the technical risk is almost nil - with enough money you know the thing can be built to work. So focus on the market risk first - and if you follow Customer Development methodology properly, you can often get the traction you need without a product.
Eliav Cohen
0
0
Eliav Cohen Entrepreneur
Investor and Founder
Congrats on bootstrapping thus far. If you get traction like you expect, you should have no problem raising money. Let me know if I can help in anyway. Have a great day! Cheers, Eliav
Joe Monastiero
0
0
Joe Monastiero Advisor
CEO, Founder nFlate
Sure to all. Firm believer in traction to reduce dilution to increase investor desire. Stay tuned, we'll be releasing shortly. I'll probably write up a case study on the nFlate raise.
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